By Lindsay Smith/Real Estate Columnist
I found my crystal ball, (buried at the back of my closet) polished it up and it had some interesting reflections and predictions. My question was, “Where do you see real estate in Durham Region in the next few years?”
When I look back on my career of selling real estate for the past 35 years, I have seen prices rise, prices fall, monthly increases larger than entire homes that I sold when I first began my career, and overheard many comments such as “prices cannot continue to rise, we must be in a bubble.”
I don’t want to say I have seen it all; however, I will share that I have seen a lot of interesting happenings in my career.
When I reach back for a memory to 1989, we were in a boom market. Prices were rising monthly and I remember a comment from a woman who was frantic to buy a home. Her comment, “I have to buy now, if not I will never be able to afford a home.” This was from a woman in her 20’s with her entire life ahead of her and the price range was below $100,000! I have always wondered if she remembers making that comment…. That same home today would be worth in the $700,000 range.
What started me pondering the future of real estate locally was a comment I read from a person online; “I have found that the experts predicting the house market have a worse track record than the weather-man.” I agree it seems confusing. Canada Housing and Mortgage Corp. predicted a nine to 18 per cent drop in values, a former MP, now a financial journalist who has predicted a “bubble burst” for over a decade, to locals droning on about how this market “cannot last.”
We are in very unusual times. I firmly believe that the Region of Durham is the “crown jewel” of real estate in all of Ontario. When I say “real estate” I mean resale homes, not new home construction. Builders cannot build enough homes to meet the demand of buyers. We have a lake to the south, the Oak Ridges Moraine to the north, and a mandate of “intensification” from the provincial government to build more homes per hectare, meaning more of what we are seeing north of Ontario Tech University.
These issues revolves around supply. With the goal of protecting the environment, the government has effectively created a fish bowl to build in, and the area that is available to build homes on is scarce or in some areas non-existent. Low supply and high demand creates spiking prices and until Durham Region finds a way of allowing more homes to be built, we will continue to see values increasing. Remember, the average price for a detached home in Oshawa is around $860,000, and Milton (the same distance to downtown Toronto that Oshawa is) around $1,200,000. I foresee Durham Region prices continuing to escalate becoming equal to the other surrounding areas of Toronto. My crystal ball shows increasing values past the end of 2021.
What about the future, one to five years out from today? It would appear that the future of the greater Oshawa area is townhomes on small lots allowing more families to enter the housing market. This helps to satisfy the need for young families, however, one of the sectors the builders have paid little to no attention to are seniors who live in homes in desirable areas, hesitant to move with little product available on one floor. One recent development was a series of upscale townhomes in Courtice built by Halmenin Homes. These townhomes offered exactly what the 60+ community is looking for – bungalow plans on one level, garages (some having double) and new upgraded features. If there were a thousand of these that hit the market they would not only sell in record time, they would allow upwards of 1,000 resale properties to be available for sale to move the owners into homes that would meet their needs.
With restrictions on getting new homes built, low rates and an influx of buyers moving from Toronto, I can see a robust resale market for the next few years. That may change if changes are made at a provincial and regional level to help development. I know, talking about helping developers may put a target on my back, however without development in a logical, well thought out manner, our home prices have nowhere to go but up.
If you have any questions on the above information, or if you see a real estate emergency on the horizon, I can be reached at email@example.com.